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American tech titans Apple and Microsoft racked up more billions in sales and profits in their latest quarterly filings — thus adding to their offshore treasure trove.
By conservative estimates, Apple has roughly $74 billion parked overseas, while software giant Microsoft has an estimated $50 billion outside the reach of US tax authorities. And eBay had $8 billion of cash on its balance sheet as of last month, with about $7 billion of it residing outside the US.
This money, while being used to fund international operations, is also out of the grasp of shareholders, who could use a larger dividend or stock buyback by the companies with that cash cache.
“Apple has conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules,” the company said in a statement about the matter.
Apple and Microsoft are, of course, by no means alone. There are varying estimates of the total amount of the huge sums parked abroad by these and other US multinationals. What everyone agrees on is that the numbers are huge.
A stunning report by the Tax Justice Network estimates that unreported US offshore wealth in tax havens has climbed to as much as $32 trillion. That’s up from $11.5 trillion in 2005, the last year the left-leaning group released estimates.
Citizens for Tax Justice estimates that the US Treasury is losing an estimated $90 billion each year from corporate giants — and an additional $40 billion to $70 billion from wealthy individuals who squirrel funds in offshore tax havens.
Congressional analysts say Uncle Sam could rake in an extra $600 billion over the next decade simply by ending the corporate tax exemption that permits US companies to defer payments through complex overseas tax dodges.
To get the money home without paying full US taxes on it, some advocate a change in the tax law.
Apple is a member of Working to Invest Now in America, or WinAmerica. The business coalition is lobbying for two congressional bills that would temporarily reduce the tax rate on repatriated earnings to 5.25 percent. That would encourage the repatriation of much of the cash that US companies have sitting in overseas accounts, the group says.
As a precedent, the temporary tax amnesty enacted in 2004 resulted in hundreds of billions of dollars being brought home.
Google, Oracle, Microsoft and Cisco are also members of WinAmerica, but none of them stand to gain as much as Apple from a tax amnesty, because they have less cash overseas.